Will Bharti SoftBank’s $7 mn investment enable Hike to take on WhatsApp?

by Sharon Lobo    Apr 26, 2013

Hike App

As adoption of smartphones continue to grow the decline in mobile voice and traditional messaging services is evident. This trend is taking a toll to telcos especially in a competitive market like India as ARPUs continue to remain low. A recent Gartner report had highlighted how India will account for 12 percent worldwide mobile connections, but just 2 percent of worldwide mobile services revenue in 2013.“As mobile voice services continue to get commoditized in the country with the increased use of voice over IP (VoIP) and the probable termination of national roaming charges, mobile broadband is the area of opportunity for operators,” said Shalini Verma, Principal Research Analyst, Gartner.

Today most users prefer using non-voice apps such as Facebook, Whatsapp to stay in touch with one another. In such a scenario it is not surprising that telcos are trying to find solace in gradual growth of mobile data services.

Recently, BSB, a joint-venture between Bharti and SoftBank that focuses on the mobile-internet space, announced $7 million fresh investment in hike, its free messaging app. The company claims that the app crossed the 5 million user mark in just four months after its launch last December. According to a press statement, BSB expects the hike app will continue to make further in-roads in India where more than 90% of the 900 million mobile users are on feature phones. However, this claim doesn’t hold water. For one, apart from smartphones the only feature phone platform hike supports is Nokia’s Series 40, which is also in case with WhatsApp.

Secondly, according to Jan Koum the CEO of WhatsApp, the messaging app has more than 200 million monthly active users who generate an average of 8 billion inbound messages and 12 billion outbound messages per day. With such a humongous number of worldwide users, the count in India should be equally significant. Also recently, Nokia released the Asha 210, a feature phone with a dedicated WhatsApp button. The only other app which had the privilege of getting a dedicated button on mainstream mobile phones was Facebook. This shows the importance handset manufacturers see in offering such a feature to make their phones appealing to users.

Additionally, the rumored WhatsApp takeover bid by Google for $1 billion only shows the value tech giants see in the company. So while BSB’s investment in hike is a good sign, they should seriously considering launching a version for non-series 40 Java ME based mobiles phones, which actually constitute a large number of feature phones. Only then can they claim to think and make a mark in the feature phone market.